Venezuela 1995 Part II

By | December 16, 2021

In February 1986 the government reached an agreement with the creditor banks to repay the external debt within 12 years; the agreement, the first in Latin America signed without having to accept a stabilization program indicated by the IMF, provided for the possibility of modifying the timing of payments in the event of sudden changes in the internal economic situation. This opportunity was invoked by Lusinchi as early as April, after yet another fall in international oil prices. In September 1987 a new agreement was reached to repay the Venezuelan debt in 14 years; Harshly criticized by the opposition, the agreement was however strongly supported by the executive, which thus hoped to have access, on favorable terms, to new international credits to finance some projects in the sectors of steel and aluminum. New austerity measures, adopted by the government in the autumn and only partially offset by a freeze on prices for basic necessities, revived social protest, also fueled by frequent cases of corruption connected with drug trafficking to and from the country. bordering Colombia in which public personalities, members of the armed forces and magistrates were implicated. To accentuate the climate of instability contributed the rumors of a possible military coup, which seemed to be about to be carried out on October 26, 1988, when some tanks surrounded the seat of Congress, the government and the presidency for a few hours, to then return to the barracks.

The so-called pendulum law, an unwritten rule that had guaranteed the alternation of power between AD and COPEI, was broken for the first time in the elections of December 1988, when an AD candidate, CA Pérez, won again. Already president in a favorable economic period (1974-78), Pérez disappointed those who hoped for a re-edition of his social reform policy, by launching in February 1989 an economic program inspired by the most uncompromising liberalism; in exchange, the president obtained a huge three-year loan from the IMF, to which a Venezuelan government was making use for the first time. For Venezuela 1998, please check

The abandonment of government control over prices and the immediate price increases that followed caused violent protests across the country; the executive had the army deployed alongside the police, then proclaimed a state of emergency (March 1989); despite the violent repression (over 300 civilian victims in Caracas alone), the protest movement continued, culminating on May 18, 1989 in the general strike, the first for over thirty years, called by the Confederación de Trabajadores de Venezuela (CTV). Heavily penalized in the municipal elections of December 1989, the ruling party saw its popularity decline further in the following months, following the involvement of some of its exponents in episodes of corruption, while the administration’s tightening of economic policies Pérez kept social protest alive in the country.

In this climate, on the night between 3 and 4 February 1992 a faction of the army, the Movimiento Revolucionario Bolivariano 200 (MRB-200), he attempted to overthrow the president and seize power by force. Saved by the prompt intervention of the troops who remained loyal to him, Pérez tried to recover the lost consensus by announcing wage increases for public employees and the temporary reintroduction of price controls for some foodstuffs and medicines. The attempt to broaden the political base of his government with the inclusion of two members of COPEI failed (March-June 1992) and new austerity measures were launched in August, Pérez also managed to overcome a second coup attempt, the work of some officials superiors of the Air Force and Navy, connected with the MRB-200 (November 27-29, 1992). The distrust in traditional parties was confirmed by the administrative elections of December 1992, which registered, Movimiento Al Socialismo (MAS), Movimiento de la Izquierda Revolucionaria (MIR), and Causa Radical (CR), whose leader, A. Istúriz, was elected mayor of Caracas.

In March 1993 the president was accused of embezzlement of public funds; two months later the Senate, with the favorable opinion of the CEO herself, determined to distance herself from a now discredited figure, voted for the authorization to proceed and the suspension from the post of Pérez. He was replaced by independent senator RJ Velásquez, elected interim president by the two combined chambers (June 1993). Appointed a cabinet of technicians and obtained special economic powers from Parliament, Velásquez proposed new budget cuts and introduced a disputed value-added tax in mid-September, from which only a few basic foodstuffs and some medicines were excluded. In a climate of renewed social protests, the elections of 5 December 1993 saw the affirmation of R. Convergencia Nacional (CN), a heterogeneous coalition comprising populist, right-wing and MAS parties. The new Congress was divided into three large camps, one linked to CN, one to CR, gratified by an excellent electoral result, and a third block in which the parliamentarians of AD and COPEI met. With the application of the controversial value added tax suspended and pardon granted to some officers involved in the failed 1992 coups d’etat, in March 1994 Caldera Rodríguez enacted an emergency finance law, which increases state control powers over banks to addressing the currency crisis that erupted following the bankruptcy of Banco Latino, the second largest commercial bank in the country.

New strikes, triggered by the drastic economic stabilization program launched in April, degenerated into clashes between demonstrators and police forces. On June 27, shaking the specter of a new military coup and invoking the need to put an end to financial speculation (200 bolívares were needed at the end of the month for one US dollar, against the 100 at the beginning of 1994), the president assumed extraordinary powers and suspended some constitutional guarantees, obtaining only after a hard confrontation the support of the national Congress (but not of CR, which abandoned the parliamentary work). Subsequently, the financial situation worsened further: this forced the government to take control of an increasing number of credit institutions and to proceed, between February and March 1995, to the second reshuffle in just twelve months of activity.

Venezuela 1995 Part II